GoChain — Product Authenticity and Anti-Counterfeiting
“The amount of total counterfeiting globally has reached to 1.2 Trillion USD in 2017 and is bound to reach 1.82 Trillion USD by the year 2020…”
- Global Brand Counterfeiting Report 2018–2020
Counterfeits — the word usually makes the average person think of money, watches or luxury purses. While consumer goods make up the largest share of the industry, counterfeiting is a huge problem for pharmaceuticals, documents, electronics, software and industrial equipment too.
It is estimated ~250 Billion USD in losses are accrued by counterfeiting high end consumer goods in the United States each year. These counterfeits are typically of inferior quality to increase profit margins, and are often sold without the brand owner’s authorization, either under another brand name or even the same brand as the original product. This results in trademark, patent or copyright infringement of the brand owner by passing off its goods as made by the brand owner.
An industry with such revenue is not without demand. A 2009 study found 80% of consumers across the world would regularly buy counterfeit or pirated products. People who have no issue purchasing fake products often cite reasons such as price and retail markup on luxury items in particular. The thought process is typically: Why would I spend $2500+ on that amazing Gucci purse when I can get one that looks exactly like it for $100?
While on the surface level consumers may think counterfeiting is relatively harmless, regardless of ruining the reputation of brands and stealing revenue from companies, recent reporting and investigations show it contributes to unethical labor markets and funding of organized crime. Some reports even go further, with U.S. authorities claiming that some of the revenue goes towards funding terrorism.
How can Blockchain help combat Counterfeiting?
Global brands have spent billions combating counterfeits goods, and while progress has been made, most methods can be replicated or copied with great accuracy. This results in a cat and mouse chase, and counterfeiters are smart. Some counterfeit high fashion pieces are on the black market just days after their appearance in fashion shows, before the real product is even at market or manufactured. Many luxury watch replicas even fool the experts.
While counterfeiting will never fully subside, mainly due to consumers conscious choice to partake, there is a new solution in recent years to help protect consumers from purchasing fake products when they intend to purchase real ones, and even resell on secondary markets — enter Blockchain.
There are several schools of thought around how to tackle this problem, and several projects are currently developing or at market with purported solutions. They can be categorized into the following:
Proprietary Hardware (RFID/NFC)
Everyone who’s ever swiped a credit card or used a hotel key has used Radio-frequency identification (RFID) technology. Manufacturers can use RFID chips, tags and stickers to assign a unique Electronic Product Code (EPC) to each product. This allows manufacturers to easily interface with a digital string attached to a physical product for supply chain cycle, manufacturing, and systems integration processes.
While RFID chips are useful for supply chain and logistics tracking, they are not able to guarantee the legitimacy of the product once they reach retail stores. No matter how tamper proof RFID chips are made, they can be read, copied and put into mass production in counterfeit manufacturing.
The GoChain blockchain is ready to use for the supply chain life cycles via RFID chip technology, but this solution doesn’t effectively address product authenticity on primary and secondary markets. We encourage you to read our Logistics & Supply Chain article to dive deeper into the benefits.
The 721 Digital Token Standard
First published as an Ethereum Improvement Proposals (EIP) in September of 2017, this digital asset standard allowed developers to create non-fungible tokens (NFTs) that are unique and not interchangeable. Combined with an immutable, decentralized blockchain, NFTs have the ability to prove ownership of any arbitrary piece of data to the greatest extent possible today. For the first time, there is now an ability to ‘own’ a piece of data with a unique identifier (such as a product serial number) that is fundamentally and mathematically unable to be copied, duplicated, or changed once created. The advent of these NFTs are monumental in providing use case for blockchain technology.
“Since GoChain is a 100% EVM (Ethereum) compatible smart contract blockchain, NFTs are able to be minted, stored and transferred with ease. In fact, our partners at ECOMI are bringing premium licensed digital collectibles to the GoChain blockchain using NFTs. GoChain is 100x faster and up-to 10000x cheaper than Ethereum, making it the ideal enterprise-grade blockchain for digital collectibles and other NFTs where transaction fees and speed are everything.”
— Travis Reeder, GoChain CTO
GoChain is natively compatible to deploy NFTs today without any proprietary technology, subscription or hardware needed. Below is an example of how a luxury product could be stored on the GoChain blockchain in the form of a product IDs and serial numbers attached to NFTs (GO-721 tokens):
Want to increase revenue by taking anti-counterfeit measures?
LVMH Moët Hennessy, the parent conglomerate behind the famous Louis Vuitton, Christian Dior and 60+ other luxury brands is preparing to launch a blockchain solution to combat counterfeiting. While they are exploring a proprietary RFID/NFC solution that’s not full proof on a questionably ‘decentralized’ network, it’s a sign that enterprise is taking blockchain seriously.
While there are other luxury provenance platforms and projects with tokens with proprietary requirements, GoChain is the only all-in-one solution with a permissioned, trusted public network that operates on a fast, efficient and affordable industry standard compatible ‘layer-1' architecture. Deploy smart contracts with our team of professionals on a private or public blockchain, and begin fighting counterfeiting with NFT technology within minutes.
GoChain’s core team of expert engineers and business professionals are dedicated to working with enterprise companies and mid-level businesses to build custom blockchain solutions. Whether your business needs general consulting, professional education, or project architecture and implementation, GoChain will be your partner and help you and your team reach all of your milestones. Let our team of experienced blockchain professionals and consultants meet with you to discuss your desired business outcomes.
Contact our team of experts today at sales@gochain.io
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